Many factors will determine whether Bitcoin is in a bull market or not. The recent jump in mining difficulty certainly shows that the network is healthier than ever. Part of this can be attributed to the recovery of most of the lost hashrate following the recent halving.
Bitcoin Mining Difficulty Soars
When people attempt to mine Bitcoin, they will have to wait quite some time for a result. That is, unless one is effectively a major mining operation with dozens, if not hundreds of ASIC at one’s disposal.
With regular computer hardware, it may take ages before a mining share is submitted to the network, let alone it being the one solving the block header.
All of this can be attributed to the current Bitcoin mining difficulty. The figure depicts how much hashpower is pointed at the network, and how complex the “puzzle” involving the block header is.
With an adjustment every 2,106 blocks, the difficulty can go higher or lower, depending on the overall network health.
According to recent statistics, the Bitcoin mining difficulty increased by 14.9%. This makes it nearly 15% more complex to solve Bitcoin blocks on the network compared to the previous 2,016. A higher Bitcoin mining difficulty does not translate to higher block rewards, as those will remain the same regardless.
— Clark Moody (@clarkmoody) June 16, 2020
Contributing to this Bitcoin mining difficulty increase is the overall network hashrate. Contrary to widespread belief, the recent block reward halving hasn’t thwarted interest in mining BTC. While there are fewer coins to be earned compared to months ago, miners remain very competitive. This translates to a current hashrate of 113 exohash per second.
A rising mining difficulty, combined with a recovering overall network hashrate, is often a bullish sign. It does not guarantee a near-term Bitcoin price increase.
However, it shows that miners are still earning money, even with reduced rewards. That is a bullish signal in itself, and one that most people didn’t expect to see at this time.
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